IAM vs PAM: What makes sense for MSPs?

| By:
Michael Bannerman

Between the rise in cybercrime and cyber insurance costs, it is no secret that managed service providers (MSPs) must be vigilant in searching for ways to fortify their cybersecurity. The Federal Bureau of Investigation (FBI) reported that cybercrime victims’ losses totaled over $10.3 billion in 2022, with the Internet Crime Complaint Center fielding an average of 2175+ complaints daily.

Two terms that frequently emerge in discussions about safeguarding sensitive data are identity access management (IAM) and privileged access management (PAM). Both concepts are important tools used to control access to critical resources, but each addresses distinct cybersecurity aspects. For MSPs, implementing PAM has become paramount due to its significance in protecting valuable assets.

Identity access management (IAM) definition

IAM revolves around managing user identities and their respective permissions within an organization’s network or system. This includes managing user authentication, authorization, multi-factor authentication, and user lifecycle management. IAM helps prevent unauthorized access and maintain compliance with regulatory requirements.

Privileged access management (PAM) definition

On the other hand, PAM zeroes in on controlling and monitoring the activities of privileged users, often referred to as “superusers” or “administrators.” These users possess elevated levels of access to critical systems, networks, and sensitive data. PAM solutions are designed to secure, manage, and audit these privileged accounts, reducing the risk of unauthorized or malicious actions that could potentially compromise the organization’s cybersecurity posture. PAM solutions ensure the principle of least privilege. This principle ensures that only the right individuals have access to the right resources at the right time.

Key differences between IAM and PAM

While both IAM and PAM serve as ways to manage access privileges, each has specific uses. Some of the major differences between the two include:

  • Macro vs. micro: IAM has a broader scope, encompassing the entire spectrum of user identities, roles, and permissions within an organization. However, PAM builds on the principle of least privilege by narrowing its focus to the management of high-level access, concentrating on protecting privileged accounts and critical devices.
  • User types: IAM aims to secure all users—including the everyday users of work stations and their access rights. It ensures their access is appropriate and aligned with their job roles. PAM deals with privileged users with elevated access privileges and control over critical systems. These users could be members of the internal IT team or an MSP who maintain the infrastructure and high value servers and devices. PAM solutions can also help limited access users gain temporary rights to perform actions that may be outside their normal job roles, but required by their duties.
  • Use cases: IAM solutions are integral for maintaining operational efficiency and ensuring the right people have access to resources to perform their duties. IAMs typically are the systems that provide a username and password for authentication and manage multifactor authentication. PAM solutions are primarily geared towards enhancing cybersecurity by securing, monitoring, and managing privileged accounts to prevent misuse. For example, a server with a database that contains personal identifiable information (PII) would need the additional protections afforded by a privileged access management solution.

Importance of PAM for MSPs

MSPs play a crucial role in delivering IT solutions and services, often managing the technology infrastructure for multiple clients. As they have access to their clients’ sensitive data and systems, they become high-value targets for cybercriminals. Focusing on PAM is of utmost importance for MSPs for many reasons, including:

  • Cybersecurity risk reduction: Privileged accounts are prime targets for cyberattacks. By implementing PAM solutions, MSPs can limit the exposure of privileged credentials, thereby mitigating the risk of unauthorized access or insider threats.
  • Compliance and auditing: PAM solutions aid MSPs in meeting compliance requirements by providing detailed audit logs and reports of privileged user activities. A strong PAM solution can help MSPs qualify for cybersecurity insurance.
  • Client trust and reputation: MSPs are entrusted with the security of their clients’ systems and data. By demonstrating a commitment to PAM, MSPs enhance their reputation, foster client trust, and attract potential clients concerned about cybersecurity.
  • Incident response and accountability: In the unfortunate event of a cybersecurity breach, PAM solutions allow MSPs to trace back activities to specific privileged accounts, aiding in incident response and accountability.
  • Internal cybersecurity measures: MSPs also need to secure their internal operations. PAM solutions help them manage internal privileged access, ensuring that only authorized personnel can make critical changes to their infrastructure.

For MSPs, focusing on PAM is imperative to safeguard not only their own operations but also the sensitive data and systems of their clients. By adopting a robust PAM solution, such as ConnectWise Access Management™, MSPs can uphold their reputation, meet compliance requirements, and reinforce their commitment to providing top-tier, security-first services in an increasingly interconnected digital landscape.